Safeland revenue returned to growth in FY2016: increased 106% vs. 1.5% decline a year earliner
22 Aug 2016 • About Safeland (
$SAF) • By InTwits
Safeland reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Safeland is a fast growth stock: FY2016 revenue growth was 106%, 5 year revenue CAGR was 15.3% at FY2016 ROIC 22.5%
- EBITDA Margin is quite volatile: 28.0% in FY2016, 65.8% in FY2015, 7.0% in FY2014, -1.6% in FY2013, -1.5% in FY2012
- Safeland has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.7%. At the same time it's a lot of higher than industry average of 32.4%.
- CAPEX is quite volatile: 0.11 in FY2016, 2.0 in FY2015, 0.12 in FY2014, 0.11 in FY2013, 0.18 in FY2012
- The company has highly profitable business model: ROIC is at 22.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Safeland ($SAF) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14.335 | 8.587 | 10.408 | 10.256 | 21.116 | 105.9% |
| Gross Profit | 1.419 | 1.481 | 2.139 | 2.761 | 7.113 | 157.6% |
| SG&A | | | | 1.570 | 1.287 | -18.0% |
| EBITDA | -0.208 | -0.139 | 0.731 | 6.752 | 5.920 | -12.3% |
| Net Income | 0.493 | 1.160 | 0.810 | 5.733 | 4.535 | -20.9% |
Balance Sheet
|
|---|
| Cash | 0.457 | 0.712 | 1.003 | 0.454 | 2.988 | 558.1% |
| Short Term Debt | 7.190 | 0.000 | 0.000 | 1.258 | 0.000 | -100.0% |
| Long Term Debt | 0.000 | 6.878 | 8.400 | 7.185 | 10.927 | 52.1% |
Cash flow
|
|---|
| Capex | 0.175 | 0.105 | 0.115 | 2.003 | 0.105 | -94.8% |
Ratios
|
|---|
| Revenue growth | 38.2% | -40.1% | 21.2% | -1.5% | 105.9% | |
| EBITDA growth | -11.9% | -33.2% | -625.9% | 823.7% | -12.3% | |
| Gross Margin | 9.9% | 17.2% | 20.6% | 26.9% | 33.7% | 6.8% |
| EBITDA Margin | -1.5% | -1.6% | 7.0% | 65.8% | 28.0% | -37.8% |
| Net Income Margin | 3.4% | 13.5% | 7.8% | 55.9% | 21.5% | -34.4% |
| SG&A, % of revenue | | | | 15.3% | 6.1% | -9.2% |
| CAPEX, % of revenue | 1.2% | 1.2% | 1.1% | 19.5% | 0.5% | -19.0% |
| ROIC | -1.3% | -1.1% | 3.7% | 31.2% | 22.5% | -8.7% |
| ROE | 5.6% | 12.4% | 8.0% | 45.2% | 27.9% | -17.3% |
| Net Debt/EBITDA | | | 10.1x | 1.2x | 1.3x | 0.2x |
Revenue and profitability
Safeland's Revenue surged on 106% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 23.7 pp from -18.7% to 5.0% in FY2016.
Gross Margin increased on 6.8 pp from 26.9% to 33.7% in FY2016. SG&A as a % of Revenue decreased on 9.2 pp from 15.3% to 6.1% in FY2016.
Net Income marign dropped on 34.4 pp from 55.9% to 21.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Safeland had CAPEX/Revenue of 0.50%. The company's CAPEX/Revenue decreased slightly on 0.73 pp from 1.2% in FY2013 to 0.50% in FY2016. It's average level of CAPEX/Revenue for the last three years was 7.0%.
Return on investment
The company operates at high and attractive ROIC (22.50%) and ROE (27.91%). ROIC decreased on 8.7 pp from 31.2% to 22.5% in FY2016. ROE dropped on 17.3 pp from 45.2% to 27.9% in FY2016.
Leverage (Debt)
Debt level is 1.3x Net Debt / EBITDA and 1.8x Debt / EBITDA. Net Debt / EBITDA jumped on 0.2x from 1.2x to 1.3x in FY2016. Debt surged on 29.4% in FY2016 while cash jumped on 558% in FY2016.
Appendix 1: Peers in Real Estate Investment & Services
Below we provide Safeland benchmarking against other companies in Real Estate Investment & Services industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Formation Group ($FRM) | -60.8% | 147.9% | 35.8% | 199.3% | |
| Development Securities ($DSC) | | | -20.4% | 156.8% | 18.9% |
| Damac Real Estate Development Ltd ($DMC) | 3.8% | 76.9% | -16.8% | 128.2% | |
| Hagl JSC ($HAG) | 39.5% | -36.9% | 10.2% | 104.7% | |
| Quintain Estates & Development ($QED) | -3.2% | -13.0% | -17.5% | 77.0% | |
| |
|---|
| Median (17 companies) | 3.2% | 20.8% | -0.1% | 14.3% | 7.8% |
|---|
| Safeland ($SAF) | | -40.1% | 21.2% | -1.5% | 105.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Arricano Real Estate ($ARO) | | 96.1% | 96.5% | 96.1% | |
| Summit Germany Ltd ($SMTG) | | | | 92.3% | |
| Taliesin Property Fund Ltd ($TPFZ) | 75.2% | 76.6% | 74.9% | 76.3% | |
| Panther Securities ($PNS) | 69.2% | 77.2% | 68.0% | 73.5% | |
| Damac Real Estate Development Ltd ($DMC) | 40.7% | 64.4% | 59.6% | 59.4% | |
| |
|---|
| Median (13 companies) | 41.0% | 50.3% | 38.5% | 34.5% | |
|---|
| Safeland ($SAF) | 9.9% | 17.2% | 20.6% | 26.9% | 33.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Quintain Estates & Development ($QED) | -81.5% | -70.4% | 43.6% | 76.3% | |
| Summit Germany Ltd ($SMTG) | 78.3% | 78.7% | 89.3% | 75.5% | |
| Damac Real Estate Development Ltd ($DMC) | 32.9% | 54.5% | 46.4% | 53.5% | |
| Panther Securities ($PNS) | 44.8% | 56.9% | 50.3% | 52.0% | |
| Hagl JSC ($HAG) | 23.1% | 40.5% | 39.6% | 28.2% | |
| |
|---|
| Median (16 companies) | 32.9% | 20.9% | 18.5% | 19.9% | 12.3% |
|---|
| Safeland ($SAF) | -1.5% | -1.6% | 7.0% | 65.8% | 28.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Quintain Estates & Development ($QED) | 210.6% | 162.3% | 217.2% | 173.3% | |
| Hagl JSC ($HAG) | 134.2% | 171.2% | 145.6% | 127.1% | |
| HALS-Development JSC ($HALS) | 83.2% | 347.0% | 25.0% | 47.3% | |
| Taliesin Property Fund Ltd ($TPFZ) | 14.1% | 21.3% | 45.2% | 43.7% | |
| Development Securities ($DSC) | | 2.9% | 13.5% | 24.6% | 2.9% |
| |
|---|
| Median (17 companies) | 3.1% | 1.8% | 4.9% | 3.1% | 2.9% |
|---|
| Safeland ($SAF) | 1.2% | 1.2% | 1.1% | 19.5% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Damac Real Estate Development Ltd ($DMC) | 163.1% | 127.1% | 31.3% | 41.5% | |
| PIK Group OJSC ($PIK) | 21.2% | 25.6% | 13.5% | 25.3% | |
| Hml Hldgs ($HMLH) | 8.2% | 9.9% | 12.5% | 12.5% | 11.3% |
| Etalon Group Ltd ($ETLN) | 12.1% | 14.4% | 14.3% | 10.2% | |
| Farglory Land Development Co Ltd ($FLDS) | 9.7% | 13.0% | 7.7% | 9.5% | |
| |
|---|
| Median (17 companies) | 4.2% | 3.0% | 3.0% | 4.8% | 5.1% |
|---|
| Safeland ($SAF) | -1.3% | -1.1% | 3.7% | 31.2% | 22.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Arricano Real Estate ($ARO) | | 11.3x | | 43.0x | |
| Plaza Centers Nv ($PLAZ) | 17.9x | | 41.9x | 25.4x | |
| London & Associated Properties ($LAS) | 40.8x | 11.1x | 13.0x | 20.2x | |
| Hagl JSC ($HAG) | 13.4x | 10.5x | 14.2x | 14.8x | |
| Panther Securities ($PNS) | 13.0x | 10.6x | 11.8x | 9.7x | |
| |
|---|
| Median (13 companies) | 8.2x | 10.5x | 10.0x | 4.5x | 5.7x |
|---|
| Safeland ($SAF) | | | 10.1x | 1.2x | 1.3x |
